IDEO equal pay commitments are very little, very late
An open letter to IDEOers Part 2
Dear IDEOers past, present, and future,
When IDEO leadership launched its diversity, equity, and inclusion commitments in June 2020, it triggered old workplace trauma for me. IDEO leadership’s commitment to pay equity, in particular, hit me right in the gut. This is a screenshot:
What this doesn’t say is that IDEO leadership has known they have a pay equity issue for over a decade. I know because I worked with IDEO’s Global Head of Talent and Organization to examine IDEO’s pay equity in 2009.
In part 1 of this letter, I described my experience as a white, female designer at IDEO navigating a career labyrinth maintained by the dominant, white, male culture. This is the story of how I found out that I was underpaid year after year compared to my white, male peers and was pushed out of the company.
IDEO is a global design company
IDEO is the international design company behind many innovations for organizations ranging from Fortune 500 companies to governments. Examples include changing the culture, mindset, and way of working at a global manufacturing firm to designing the first all-in-one wearable breast pump.
Though IDEO had no stated mission during my tenure, today, IDEO’s mission is to create positive impact through design. In their informal employee manual, The Little Book of IDEO, IDEO leadership presents their goal of being a “great meritocracy”. In the words of co-founder David Kelley, the workplace culture aspires to be, “like summer break from college all the time for me and my pals.”
I joined IDEO in 2001 right after graduating from Harvey Mudd College with a bachelor’s degree in engineering. To celebrate my first week at IDEO, all forty-ish members of my location gathered outside on a hot and humid Friday afternoon in a suburban office park. As each person scooped their favorite ice cream flavor, I used a launcher I built during employee onboarding to shoot berries into their bowls. This was the first of many incredibly creative and joyful moments I had throughout the eight years I worked there. But, as I described in Breaking the Trance, it wasn’t long before lighthearted games could not hide the inequities I’d come to experience inside the walls of the company.
Pay equity data provided hard evidence of bias at IDEO eleven years ago
In 2008, I was a mid-level project leader and engineering designer in a satellite IDEO location. I had personally experienced many obstacles at work and had seen many talented people of color and women at my location terminated. Based on this experience, I assumed I too would be terminated for no substantive cause at an unpredictable time due to not fitting the predominant, white, male employee archetype. I had been reading literature on women in the workplace to better understand how to navigate IDEO’s biased career labyrith. One thing I learned is that transparent salary determination processes were shown to shrink pay gaps in many companies.
IDEO had just instituted a new, comprehensive level and salary band framework around 2006. I asked IDEO’s Global Head of Talent and Organization if we could look at anonymized pay data over multiple years to see what effect this career navigation framework had on improving pay equity between demographic groups. Nine months later, I received anonymized pay data for the entire company. I analyzed the data for approximately 300 U.S. employees who had been assigned a level at IDEO during the years 2006–2009. What I found was disturbing.
Using myself as just one example, I was underpaid every year between 2006 to 2009 by an average of three percent compared to the average pay of the white male designers at my same level. You would expect any single individual’s pay to be a little more than average some years and a little less in others. It was striking to see that I was on the losing end compared to my white, male peers every year.
Before I provided any of the pay equity analysis results to anyone, my location leadership began the process of pushing me out of the company. In September 2009, they put me on performance probation based on anonymous negative feedback, after giving me a promotion and a five percent raise earlier that same year. In a late Friday afternoon meeting, our newly-appointed location lead offered me an ultimatum; leave today or show us you can improve in the next eight weeks. This person is a partner at IDEO today.
IDEO was a core part of my professional identity. Though I had expected to be terminated eventually for no good reason, when it finally happened it was debilitating. Being cast out by an organization that I had given so many years to and loved very much still wreaked havoc on my professional confidence.
After finding my bearings, I filed a gender discrimination complaint at IDEO including a line-by-line refutation of the performance review. Ultimately, their gaslighting efforts in response to my complaint led to such a toxic work environment that I opted to leave the company in January 2010 in the hopes of finding a healthier work environment that wasn’t focused on near-term profitability at all costs.
In the end, I never shared what I learned about pay equity at IDEO with anyone — even IDEO. I was afraid sharing it with IDEO leadership would further damage my professional reputation, risk a new job offer I had just received, and affect my ability to be employed in the future. I was silent.
Small pay gaps lead to large financial losses
On the surface, three percent may sound like a fairly modest pay gap. Assuming I was underpaid by three percent on average all 8.5 years I worked at IDEO, I missed out on at least $20k in earnings. Since I wasn’t able to save that money for retirement, by the time I am 65 years old, my 401k will have $800k less than if IDEO had provided equal pay for equal work. I effectively lost twice the average American retirement savings.
Many people don’t realize that pay inequality between genders has been illegal in the U.S. since the Equal Pay Act of 1963, and pay inequality by race has been illegal since passing Title VII of the Civil Rights Act of 1964. But, unlike Iceland, the U.S. does not require companies to assess their pay equity or to prove that they have closed their pay equity gaps.
Many people also assume fixing the pay equity gap would come at prohibitive costs to businesses. This is simply not true. What would it take for a business the size of IDEO to correct systemic pay equity gaps? Consider the hypothetical case of a private, professional services firm that has:
- $100M annual revenue
- 15% profit
- 500 employees
- average employee base pay of $94k
- 30 partner owners
- average annual partner compensation of $300k
To correct a five percent pay equity deficit affecting half of the employees, the partners would need to allocate about $1M. That is equivalent to 8% of the company’s $15M annual profits, or 11% of the annual partner compensation budget.
Instead of providing equitable pay for all employees, a leadership team motivated by near-term, personal profits could spend less than $1M to avoid confronting the reality that they are perpetuating a system with second-class citizens who are paid less to do the same job.
In the end, IDEO leadership decided it was cheaper to push me out.
Pay inequity affects our BIPOC colleagues the most
My individual financial loss at IDEO isn’t the complete story of who is ultimately on the losing end of pay inequity; our colleagues who are Black, Indigenous, and people of color (aka BIPOC) are.
You see, my partner is a white man who had a full-time, salaried, engineering job. I combined my finances with his through marriage. Assuming the pay equity divide exists in every workplace that hasn’t taken intentional steps to eradicate it, I have to acknowledge that our family is living off of the additional pay given to my husband and taken away from his BIPOC and female colleagues. His gains made up for my losses. For these reasons, I was able to leave my job at IDEO which provided good pay and solid benefits, to take a job with lower pay and fewer benefits that gave me happiness and peace of mind.
But, not everybody chooses a white man for a partner.
Thanks to the Black Lives Matter movement, and scholars including Isabel Wilkerson, I have come to understand that there is a staggering gap in wealth between white families and Black, Hispanic, or mixed-race and other families in the U.S. This is a facet of how America’s enduring caste system works. Any company that continues to pay white men more than others is upholding this system. A system of pay inequity disproportionately punishes families headed by females, nonbinary people, and, most of all, people of color whose families are punished from one generation to the next. Understanding this magnified injustice in wealth based on race is what motivates me to speak up today, eleven years after leaving IDEO.
IDEO leadership’s pay equity commitment is very little, very late
IDEO’s June 2020 DEI commitments give the appearance that IDEO leadership is finally focusing on pay equity. I learned that IDEO leadership performed a new pay equity analysis in Fall 2020 to determine if there are any statistically significant pay gaps by race and gender… and they found none! I also learned that many current employees are not satisfied with the analysis that was done. It’s hard to trust a process conducted behind closed doors by a group of leaders with a long history of deprioritizing and even shutting down pay equity initiatives. What was that thing Mark Twain said about statistics again?
To muster the courage to share my story, I had to give up on the idea that I could change IDEO, something I had tried and failed to do many times. Instead, I am focusing on my responsibility to provide information to IDEOers as individuals in hopes they will have the wisdom and fortitude to use it in any way they can to improve their lives. Current IDEOers — I discovered some of you have taken the brave step to launch your own PayDEO salary transparency survey and are calling on IDEO leadership to deliver pay transparency. Improving IDEO would be a wonderful outcome of these efforts and I wish you all the courage and success!
After having worked with an IDEO global pay dataset myself, I propose the best analytical method is to take an intersectional approach. The goal should be to look at race and gender simultaneously and compare each sub-group’s average pay to the average pay of white men at the same level. For Equal Pay Day March 2021, I wrote an article discussing why this type of intersectional pay analysis is important to uncover the true pay gap for white women and men of color and reveal the double penalty experienced by women of color.
In this letter, I did not share the overall results of the race and gender pay equity analysis in 2009. In the spirit of investigating every claim in George’s article Surviving IDEO, you can ask IDEO leadership to issue a legal waiver that would protect me in sharing the full results publicly. Learning from the past is one of the best ways to avoid repeating it.
Achieving pay equity is a matter of IDEO partner priorities
Finally, the most important question remains: when will IDEO leadership deliver on their commitment to pay equity in a way that employees can trust? 2021? 2031? IDEO leadership has yet to publicly commit to a deadline. As an example, Starbucks leadership decided it was ok to take ten years to deliver 100% pay equity for its U.S. employees, finally meeting its goal in 2018. If IDEO leadership had taken action in 2009, surely IDEOers would be benefiting today.
IDEO is a private company with the majority ownership split between about thirty partners. In 2020, the IDEO partners shared the company’s demographics but chose not to share their own demographics publicly. From their photos on LinkedIn, nearly all of the partners are white, and two-thirds appear to be white men.
Ultimately, achieving pay equity at IDEO is a matter of priorities set by the majority white and male partners.
In evaluating their demographics, it doesn’t surprise me why addressing any race and gender pay equity issue at the company has been lagging for over a decade. Instead, the leadership prioritizes offices located on some of the most expensive real estate in the world (a dock in San Francisco!) and a constant flow of free lunches, gourmet pastries, and off-site activities (ski trips!). With their annualized budget, it is eminently possible for the partners to fix even a $1M pay equity gap in a single year. If they didn’t want to reduce their cake budget, they could probably achieve it by taking a 10% pay cut. In the end, they would likely recover any losses through increased company profitability from a more diverse workforce.
Instead, it feels like the IDEO partners want to enjoy their luxuries while the most vulnerable among them wait patiently in the dark believing pay equity is a hard thing to achieve, even though they should have started eleven years ago, or really when IDEO was founded thirty years ago.
IDEO leadership’s pay equity commitment doesn’t feel like a movement or even a mandate.
Finding my creative confidence beyond IDEO’s walls
Looking back on my time at IDEO, I am incredibly grateful to my colleagues, including my talented and intrepid mentor, who taught me the methods and mindsets of human-centered design which are the foundation of my career today. Since leaving IDEO, I have spent the past eleven years using human-centered design to co-create medical technologies with people in under-resourced global health contexts. Today, I am working on devices to provide continuous lighting and oxygen at healthcare facilities with frequent power outages in Sub-Saharan Africa, and leading a team to design an applicator for a shelf-stable vaccine patch.
Nevertheless, I left IDEO feeling insecure about my talents and traumatized by my vulnerability to leaders in the workplace. Sentiments in Glassdoor IDEO reviews from the past few years range from “toxic culture” to “you’ll never have it this good again.” The latter idea made it hard for me to move on. IDEO is a globally influential brand. You’re made to feel as if any place you go next is a step-down. Ironically, it was only after I left that a new world opened up to me.
As I stepped out of the echo chamber, I realized anyone in the world could be part of my design team. I found opportunities to work toward positive outcomes defined by community stakeholders that were more satisfying than any project I completed at IDEO. It turns out the sentiment was true: I never had it that good again. I had it better. I forged a new identity as a designer who was no longer defined by a single brand or company. I rediscovered my own creative confidence beyond IDEO’s walls.
Epilogue: covering their tracks
After I left IDEO on January 8, 2010, I reconnected with IDEO’s Global Head of Talent and Organization to see if he would make an effort to alleviate bias at IDEO. He wrote,
“Yes, until now, perhaps we’ve not been great at developing people in an intentional way. But, no, we don’t feel there is an illegal bias against women in this suboptimal practice.”
In an attempt to suggest IDEO was dedicated to diversity, equity, and inclusion, he forwarded me an all-IDEO email from an IDEO partner who is still an IDEO partner today. It read:
“Isn’t it just a matter of time before we’re more gender-balanced? Won’t we naturally see an increase in the number of strong women leadership candidates in the next 3–5 years? Of course, we will. The numbers show it. But, there appears to be something deeper here. Beyond the widely held knowledge that women are generally disadvantaged by the systems, structures, and behaviors of business environments. IDEO’s existing ways, leadership tendencies, and talent development processes may create conditions that disadvantage people who don’t map to our existing leadership norms — women being just one of the more obvious. Yes, we believe we have a problem. But, it’s one that we can begin to address intentionally.”
These commitments sound pretty familiar.
By sharing my story, I hope to help IDEOers understand how a culture that rewards white, male designers above all others not only diminishes the abilities of so many but also leads to personal financial losses for those who don’t fit this dominant employee archetype. This system penalizes our BIPOC friends the most who experience astounding financial losses generation after generation.
IDEOers, I hope this information will help you to find an equitable career path for yourself. Without equal pay for equal work, we cannot have a diverse array of designers. Without a diverse array of designers, our society cannot truly design for all.
Best of luck,
Elizabeth
Click here to read part 1 of this letter: Breaking the trance: how I escaped IDEO’s biased career labyrinth
If you would like to contact me privately about this article, please DM me on Medium, LinkedIn, or Twitter.
There’s a small but mighty group of people supporting each other in a judgment-free space where we’re #survivingIDEO together.
If you would like to share your story, Mark Wilson of Fast Company is interested in connecting with alumni and promises to maintain anonymity. DM at @ctrlzee.
